Catching Credit Card Errors

One way to avoid billing errors and incorrect fees is to carefully check your monthly credit-card statement to make sure that every charge, debit, fee, and payment are 100% correct. You should also check to make sure that your interest rate matches what you were told it would be.

If you find errors on your charge card account then you can use the provisions of the The Fair Credit Billing Act to have the errors corrected. It's important, however, to follow the reporting requirements of the Act completely so you don't lose your right to protection. It's as easy as 1-2-3. Here's what you need to do:

Write to your card issuer or creditor within 60 days after the first bill containing the disputed charge is mailed to you. (Even if more than 60 days has passed since you were billed for the item, you still might be able to dispute the charge if you only recently learned about the problem.)
In the letter, give your name, account number, the date and amount of the disputed charge and a complete explanation of why you are disputing the charge.
Send your letter to the Billing Errors address provided on the bill -- do not send the letter with your payment. (To be sure that your letter is received and that you will have a record of its delivery, you might want to send it by certified mail, with a return receipt requested.)

Under the Act, the card issuer must acknowledge your letter, in writing, within 30 days after receipt and must conduct an investigation within 90 days. You don't have to pay the amount in dispute while the investigation is being conducted. Also, the card issuer may not take any action disputed amount, report the amount as delinquent to a credit reporting agency, or restrict your account in any way during the investigative period. They are allowed to tell credit reporting agencies that there is an ongoing dispute under investigation.

If the investigation is resolved in your favor then the card issuer is required to credit your account and remove any finance charges or late fees relating to the disputed amount. If, however, it is determined that you do owe the disputed amount then the card issuer must notify you in writing why they have determined that you are responsible to pay the disputed amount. They may then add any finance charges that have accrued during the investigative period as well as any finance charges that had accrued prior to your reporting the problem. You still have a right to refuse to pay the disputed amount, but the Act will no longer protect you against collection efforts or damage to your credit history. If you notify the card issuer, in writing, that you still dispute the charges then they are required to report this fact to the credit reporting agencies.

Never assume that "big banks" don't make errors. They happen all of the time. Be sure to head off any problems early by reviewing your statements as soon as they arrive.